How We Do It: Design Fees & Rebates at Wayside

The design process at Wayside Landscape Services begins with a client interview and site evaluation. Based on the information gathered, one or more preliminary plans are produced and presented to the client for review and analysis, which usually leads to a final plan and proposal.

The design process can be more or less involved, depending upon the client’s circumstances and desires. Because of all these variables, Wayside charges $75 per hour, plus related costs (blueprints, working copies, photos, etc.) for its design/consultation services. Travel time is considered a necessary part of the design/consultation process and is billed at the same rate, which is guaranteed through the current calendar year. The minimum design/consultation fee is $200. Basically, not much can be accomplished in less than eight to 10 hours – between 16 and 24 hours of design time would be more typical for our average projects. Design fees are invoiced monthly and a $500 retainer is collected at contract inception.

We feel so strongly about the importance of the design process in the development of a landscape that we rebate design fees when we complete a job. This is done to remove the concern over design fees from the decision whether or not to employ a professional landscape designer.

We will rebate design fees up to 5 percent of the regular price of materials or services purchased from and installed by us for the purpose of completing the design. The work must be completed within 12 months of the proposal submission date to be eligible for rebate. In some cases, this results in a 100-percent design fee rebate. This rebate is not applied to subcontractor fees, is never larger than the actual design fee, and is applied to the final project invoice.

Here’s an example of how the rebate works:

Mr. and Mrs. John Doe hire us to design their landscape by signing a design contract and paying a $500 retainer.

One of our designers spends 20 hours working for the Does. The designer has outside expenses totaling $30. The total design bill for the Doe project is $1,530 (20 hours at $75 per hour = $1,500, plus $30 for outside expenses). This bill is due at the conclusion of the design work.

Of the total design bill, $1,500 is eligible for rebate because outside expenses are not rebated. Wayside’s price for completing the Doe landscape project is $35,000. Wayside intends to use a subcontractor for $10,000 of the work. Because the rebate is not applied to subcontractor fees, only $25,000 of the total project cost is used as the basis for calculating the rebate. The maximum rebate the Does are eligible for is $1,250 (5 percent of $25,000).

The Does want to phase the work, doing half this year and the other half in two years. Wayside invoices the Does for $17,500 after completing phase one. Of this amount, $10,000 was subcontracted. This leaves $7,500 as the base amount for calculating the rebate. A total of $375 (5 percent of $7,500) of the $1,500 design fee is rebated in the form of a credit on the phase one invoice. Because the Does won’t complete the project within the next 12 months, they will not be eligible for any further rebates on this project.

But if they change their minds and want to complete the project during the first year, then they will be eligible for an additional $875 rebate (5 percent of $17,500) in the form of a credit on the final project invoice. In this case, 82 percent of all design fees would be rebated.

As you can see, the rebate amount depends on many factors. For many of our projects, the design fee is completely rebated. – Andy White

The author is president and majority owner of Wayside Landscape Services, Asheville, N.C. and can be reached at waysidelandscape@mindspring.com.

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